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In­ter­net can be a hin­drance

IN­FOR­MA­TION Home­buy­ers these days have easy ac­cess to a wealth of in­for­ma­tion on the in­ter­net about the prop­erty mar­ket in gen­eral and tar­geted ar­eas in par­tic­u­lar.

Martin Schultheiss, CEO of the Har­courts Africa prop­erty group, says valid in­for­ma­tion does make buy­ers’ de­ci­sions eas­ier. “Vi­tal statis­tics about any given area are just a few mouse clicks away and a quick search can re­veal cur­rent and his­tor­i­cal price trends, crime stats, neigh­bour­hood de­mo­graph­ics, com­mu­nity ser­vices and much more. “How­ever, abun­dant in­for­ma­tion may be­come over­whelm­ing and lead to in­de­ci­sion. In the quest for ever-more in­for­ma­tion, the search for statis­tics may be­come the main ob­jec­tive, lead­ing to con­sumers missing good buy­ing op­por­tu­ni­ties.”

He says prospec­tive buy­ers must keep in mind that statis­tics may not tell the full story. “Cold fig­ures of­ten do not cap­ture the sub­tleties of a sit­u­a­tion and noth­ing beats a per­sonal visit to an area to form your own im­pres­sions. Cur­rent statis­tics may, for ex­am­ple, mis­rep­re­sent an area that is show­ing early signs of re­newal and which thus holds the prom­ise of es­ca­lat­ing prop­erty val­ues. And, as sea­soned home­buy­ers know, get­ting in early is the key to the biggest gains.”

Pos­i­tive out­look for house prices

RE­COV­ERY Ac­cord­ing to the lat­est re­sults re­leased by ooba, SA’s lead­ing bond orig­i­na­tor, in­di­ca­tors con­tinue to point to a pos­i­tive out­look for the lo­cal res­i­den­tial prop­erty mar­ket.

The oo­barom­e­ter price in­dex re­vealed that the av­er­age house price rose 6,8% yearon-year in June to R837 599 from R784 427 a year ear­lier. “House prices are con­tin­u­ing to in­crease, al­beit at a slower pace than in the past few months,” says Saul Gef­fen at ooba. “We have seen sharp re­cov­ery in house prices for the first half of this year with three months of dou­ble digit year-on- year house price growth be­tween Fe­bru­ary and May.” The growth in the av­er­age pur­chase price among first time buy­ers re­mains strong, with year-on-year growth of 12,1% in June. “We are see­ing a con­tin­ued eas­ing in lend­ing cri­te­ria, which is good news for po­ten­tial home­buy­ers and the prop­erty mar­ket in gen­eral.”

The av­er­age de­cline ra­tio in­creased marginally in June, up 1,3% year-on-year to 48,8% from 47,5% a year ear­lier, due to the higher pro­por­tion of 100% loans in June. How­ever, on a month-on-month ba­sis the de­cline ra­tio fell 4,1% to 48,8% from 52,9% in May. The ra­tio of ap­pli­ca­tions de­clined by one lender but ap­proved by an­other in­creased 7,5% year on year to 24,8%. “This is good news for home­buy­ers, as it in­di­cates a higher prob­a­bil­ity of loan ap­proval from an­other bank even if ini­tially de­clined. It also demon­strates the im­por­tance of shop­ping around in se­cur­ing home loan ap­proval.”

Call to re­place ‘voetstoots’ clause

GUAR­AN­TEES Look­ing past the cur­rent de­bate on the “voetstoots” clause in prop­erty sale agree­ments and whether it will still be al­lowed when the new Con­sumer Pro­tec­tion Act (CPA) comes into ef­fect later this year, RealNet says there is a sim­ple an­swer, and that is in­de­pen­dent home in­spec­tion.

Jan Davel, COO and di­rec­tor of the es­tate agency group, notes that in the US and UK, a prop­erty be­ing sold must pass a home in­spec­tion or “ap­praisal” by an in­de­pen­dent, ac­cred­ited ex­pert in or­der for the prospec­tive buyer to ob­tain a home loan. “And al­though this sys­tem was orig­i­nally in­tro­duced to give the len­ders peace of mind, a sat­is­fac­tory ap­praisal is also of great ben­e­fit to the home­buyer — and to the seller, who then doesn’t have to worry about post-sale comebacks from buy­ers un­happy with their choice.”

He sug­gests that a sim­i­lar sys­tem should be in­tro­duced in SA, where most res­i­den­tial prop­erty sale agree­ments still con­tain a stan­dard “voetstoots” clause that ba­si­cally means that the prop­erty is be­ing sold “as is” and with­out any guar­an­tees.

“This clause is seen as be­ing all in favour of sell­ers, as it pro­tects them from li­a­bil­ity for la­tent or hid­den de­fects, but things are sel­dom so clear-cut. Buy­ers can still sue for dam­ages if they be­lieve there was de­lib­er­ate non-dis­clo­sure of la­tent de­fects by sell­ers, and they can and do try other ways to get deals can­celled if they feel cheated.” Lawhill build­ing, left, right next to One&Only Cape Town

Se­eff V&A sell the en­tire Lawhill block

RECORD SALE Se­eff has achieved what ap­pears to be an­other record for SA – pos­si­bly the high­est priced res­i­den­tial prop­erty sale to one pur­chaser — sell­ing all 30 apart­ments in Lawhill, the last devel­op­ment in the V&A Ma­rina, for ap­prox­i­mately R245m. Two years ago this same branch of Se­eff sold Pent­house Three at the One&Only Cape Town for more than R111m.

Said Ian Slot, MD of Se­eff At­lantic Seaboard, V&A Water­front, CBD & City Bowl, said: “Where else would both the high­est price ever paid and the high­est price ever paid by one per­son oc­cur in SA, other than in the V&A Water­front — the jewel in the crown of Cape Town?” Se­eff is also man­ag­ing the let­ting of the 30 apart­ments in Lawhill as hol­i­day or cor­po­rate short lets.

House your port­fo­lio in in­vest­ment trust

IN­VEST­MENT STRAT­EGY Much is said about the ne­ces­sity of build­ing an in­vest­ment port­fo­lio in or­der to en­sure a com­fort­able re­tire­ment. How­ever, one of the first things to con­sider be­fore im­ple­ment­ing an in­vest­ment strat­egy is whether as an in­vestor you should house the in­vest­ments in your own name or in a trust.

David Warneke, Tax Part­ner at Cameron and Pren­tice Char­tered Ac­coun­tants says that in gen­eral, for growth in­vest­ments a trust is prefer­able for a va­ri­ety of rea­sons. “Purely from a tax point of view, trusts have sev­eral ad­van­tages over in­di­vid­u­als even though the rate of in­come tax payable by a trust (40% flat rate) is higher than that of an in­di­vid­ual (a slid­ing scale go­ing up to a max­i­mum of 40%). The most im­por­tant of these is the pro­tec­tion of growth in the un­der­ly­ing as­sets from the in­vestors’ cred­i­tors.”

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